Bitcoin is ticking up again this Monday, up above $7700, after struggling at about $700 less than that just a week ago. Some analysts looking closely at the cryptocurrency are contending that a lot of the increase is happening as the Bitcoin mining reward halving event approaches, and not as a result of a more buoyant stock market.
“While the major part of the recovery rally could be associated with the uptick in the S&P 500 and the global stock markets, the recent move from the April 21 low of $6,800 to $7,800 looks to have been fueled by factors other than moves in equities,” writes Omkar Godbole at Coindesk. “That’s evident from the fact that Bitcoin rose 8 percent last week, while the S&P 500 suffered a 1.3 percent loss and oil markets cratered on oversupply concerns.”
To be fair, the S&P 500 and Dow Jones industrial average have both rebounded from stomach-churning lows just over a week ago. But on the other hand, analysts have been talking about a Bitcoin bump from the halving since last year.
“The Bitcoin halving (sometimes referred to as ‘the halvening’) is an event programmed into Bitcoin’s code,” wrote Christina Comben at Coinrivet just before Hallowe’en of last year. “It happens after every 210,000 blocks have been mined (approximately every four years) and the block reward paid out to miners for keeping the network secure is cut in half. The next Bitcoin halving in May will reduce the reward to 6.25 BTC. … Why does this matter and how could it affect the price? Because the Bitcoin halving has so far shown a perfect track record for ascending its price.”
More recently, others who are watching BTC for the “halvening” are a bit more circumspect.
“While the halving may persuade some users to take the plunge, others in the Bitcoin world may find that the new rules — the 6.25 BTC reward — don’t suit them,” writes Ashish Singhal at Cointelegraph, April 23, while suggesting the new halving takes place in a radically different context, when people have mostly already heard about Bitcoin. “Miners may see the price of Bitcoin appreciate, which is something they’re likely to welcome, but there are doubts about whether the theoretical increase in price can match the expected doubling in mining costs.”
In mid-May, we will see how changing the block reward actually impacts Bitcoin values and volumes.
Until then, keep looking at indicators and make your best guess.
